TaxTMI 
TaxTMI 
2012 (5) TMI 151
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....regating to Rs. 3,20,23,804/- as per valuation report dt 22.3.2004 of M/s Shah & Shah, the break up of which are as under: (i) Largeness Factor (40%) 1,50,67,810 (ii) Cost of Development work of garden area 1,10,00,000 (iii) Construction of Storm water drain, approach road and compound wall in garden area 25,00,000 (iv) Deduction on account of deferred value at 10% for 5 years. 34,55,994 Total 3,20,23,804 3. This is the second round of litigation. Since the assessment was originally completed ex-parte, the Tribunal vide order dated 14.5.2007 set aside the assessment for the year under consideration and directed the Assessing Officer to frame the same de-novo as per law and after allowing opportunity of being heard to the assessee. 3.1 The brief facts leading to the controversy are that the assessee is a private limited company engaged in the business of hotel. There was a search and seizure operation at the premises of the Group companies on 7.11.2000. Since the assessee has not filed any return of wealth for the year under consideration; therefore, the assessment was completed u/s 16(5) r.w.s 17 ....
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....t Year 1997-98 and 1998-99. 6. Before us, the ld. Authorised Representative of the assessee has submitted that the land in question is an Urban land but falling in the non-development zone and therefore, there is restriction on the construction of the land in question as per Maharashtra Regional Town Planning Act, 1966 (MRTP- 1966). The ld. Authorised Representative has referred section 43 of the MRTP Act and submitted that there is a restriction of development of land which falls in the notified area. He has further submitted that in the year 1992, the State Government vide its notification dated 12.11.1992 has withdrawn 50% of reservation on the land in question and included in C-I Zone only for the purpose of hotel industry subject to the condition that the assessee should develop and maintain park and keep it open for general public before undertaking the development of the hotel. Thus, the Government has allowed 50% of the land to be developed for hotel purpose with the condition that the remaining 50% should be developed and maintained as a park for public and keep it open for the general public. 6.1 The ld. Authorised Representative has further submitted that after the....
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....p before the Hon'ble Supreme Court for determining the market value for compensation against the acquisition of the land, the Hon'ble Supreme Court upheld the view of the Hon'ble High Court for deduction on account of large track of land in comparison to the transactions relate to smaller extent of land. The ld AR has submitted that the Hon'ble High Court has granted 40% deduction in the said case which was upheld by the Hon'ble Supreme Court. In the case of the assessee, the land in question is having larger area of 45104.70 sq.mtr (i.e. 12 acres), and the rate adopted as per the Stamp Duty Valuation Authorities is for the smaller piece of land; therefore, the assessee is entitled for deduction on this account. 6.3 Apart from this, the Id AR has further contended that the assessee has incurred Rs. 1,35,00,000 towards development work of garden area; construction of storm water drain; approach road and compound wall in garden area; therefore, the same should be allowed as deduction for computation of value of the land. 6.4 On the other hand, the Id DR has submitted that once notification was issued by the State Government, there was no prohibition on the development of the la....
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....essee acquired the land in question vide order of the Company Law Board dated 30.1.1995 which means that the assessee acquired the land in question after the notification dated 30.11.1992 and therefore, the prohibition against the development and construction of the land in question was not in existence when the assessee acquired the land in question. 7.4 The assessee contended that until and unless the approval and commencement certificate is granted by the Municipal Corporation of Greater Bombay (MCGB) dated 3.7.1998, the assessee could not develop the property in question and therefore, the same cannot be assessed to wealth tax as falls under the exception provided in Explanation 1 to sec 2(ea). We do not agree with the contention of the assessee because the prohibition for development and construction of the land was only upto 12.11.1992 and once the 50% of the land was released from the reserved category for development of hotel, then it was upto the assessee to comply with the conditions as prescribed under the said notification for development and construction of the hotel. Therefore, there was no prohibition against the development of the land under any law time being in....
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....us metals, whether or not containing any precious or semi-precious stones, and whether or not worked or sewn into any wearing apparel; (ii) precious or semi-precious stones, whether or not set in any furniture, utensils or other article or worked or sewn into any wearing apparel; (b) "urban land" means land situate- (i) in any area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a population of not less than ten thousand according to the last preceding census of which the relevant figures have been published before the valuation date ; or (ii) in any area within such distance, not being more than eight kilometres from the local limits of any munici-pality or cantonment board referred to in sub-clause (i), as the Central Government may, having regard to the extent of, and scope for, urbanisation of that area and other relevant considerations, specify in this behalf by notification^22 in the Official Gazette, but does not include land on which con....
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....ion 1. 8.1 We find that the notification has permitted the development of the land only for hotel; therefore, after the said notification, the land in question cannot be developed other than hotel and there is no dispute on this point that the land was finally developed by constructing the hotel by the assessee. Even, the MCGB vide its letter dated 10.6.1994 has acknowledged this fact that 50% of the land in question is reserved for recreation ground and the remaining 50% is deleted from the reservation and placed in Local Commercial Zone (C-I) for specific purpose of Hotel projects only. Thus, there is no ambiguity on this point that the land could be developed only for hotel project and as relied upon by the Id AR of the assessee that the connotation of terms Industry as per the Industrial Development Bank of India Act 1964, the hotel comes under the definition of Industry. Nothing has been brought before us to controvert this position that the hotel project falls under the terms 'industrial concern' as provided u/s 3 (c) of the Industrial Development Bank of India Act, 1964. 8.2 Having accepted that the Hotel is an industry, assessee's claim falls under the exception as pr....
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....ne Gujarat High Court deducted 60% of the value, this Court in M/s. Hasanali Khanbhai & Sons & Ors. v. State of Gujarat [C.A. No. 3263/79] dated July 26, 1995, upheld the deduction of 60% by the High Court. When genuine and reliable sale deeds of small extents were considered to determine market value, the same will not form sole basis to determine market value of large track of lands. Sufficient deduction should be made to arrive at the just and fair market value of large track of land. In that view of the law, we are of the considered opinion that ratio in the cases in which it was dealt with only about deduction of developmental charges of undeveloped large extent of land does not render any assistance in deciding the principle followed by the High Court in this matter. In view of the judgment of this Court in Administrator General of West Bengal's case [supra] and all subsequent decisions, we do not think that it is a proper case for interference." 9.2 Accordingly, in view of the decision of the Hon'ble Supreme Court in the case of K Vasundara Devi (supra), we allow the deduction of 40% while computing the fair market value of the land in question on account of large track o....